March 17, 2006

Are we doing better?

Every three years the federal reserve takes stock of the financial situation of American households by issuing the survey of consumer finances. N.C. State University economist Mike Walden says that the recently released survey, for 2001-2004, included both good and bad news.

“As in most of these surveys ... you have good news and bad news,” says Walden, a specialist with North Carolina Cooperative Extension.

“The good news is that median income for the average household did indeed go up, as did median net worth.

“The bad news, however, is that income fell for about half of the income categories, and net worth fell for the lowest income categories,” he adds.

“Also even though I indicated that the average household made income gains over the last three years, those gains were at a much slower rate than we saw for the 1998-2001 period.

“So I think you can say that we’ve had mixed results, mixed gains.

“Of course you should put this in perspective: We did have the 2001 recession and the very slow recovery,” he notes. “So we really I think have to wait ‘til the next survey which takes place during a period of economic expansion to get a better view on how we are doing.”